The SBA Mentor-Protege Program

When a company is small, the SBA Mentor-Protege Program can provide the expertise of a large, experienced company to help it along with government contracting.

The SBA's mentor-protege program brings together 8(a) participants and experienced entrepreneurs. It is a unique tutoring process for entrepreneurs. The SBA considers those entrepreneurs who are socially or economically disadvantages to be eligible for the 8(a) program. Speak with a representative at the SBA for clarification on whether or not your company may qualify.

To participate, an entrepreneur must first be eligible for the 8(a) program.

The protege company must:

• be in the developmental stage of the 8(a) Business Development program, or
• never have received an 8(a) contract, or
• be less than half the size of a small business, as defined by the SBA, based on its primary Standard Industrial Classification code,
• be in good standing in the 8(a) Business Development Program, and
• be current with all 8(a) reporting requirements.

While an 8(a) company can only have one mentor at a time, that mentor can provide significant assistance. For instance, a mentor may provide you with 

Technical and management assistance. The mentor's expertise, resources and capabilities are made available to you.

Financial assistance in the form of equity investments or loans. A mentor can own equity interest of up to 40% in your business to help it raise financing.

Subcontract support. Your mentor can enter into a joint-venture arrangement with you to compete for government contracts.

Assistance in performing prime contracts through joint-venture arrangements with 8(a) businesses.

What companies become mentors?

The SBA makes every effort to connect companies that are simpatico. The arrangement must benefit both, or it doesn't work. For instance, bringing together a young apparel manufacturer with an oil-developer mentor would not work. But when that young apparel manufacturer is mentored by a garment manufacturer that supplies to the U.S. Army, a good match is created. The "minority" status of the young company will assist the mentor in gaining government contracts, and the experience of the mentor company will flow to the protege.

The mentor/protege arrangement is a formal written commitment of at least a year.

The mentor company must be strong financially, be profitable for at least the past two years and be a federal contractor in good standing.

Contact your local SBA office for information on how your company may become part of the mentor/protege program.

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